Gold: a new price target, favourite stocks and when to sell
Having captured the imagination of retail investors, asset managers and governments worldwide, City writer Graeme Evans explains current thinking about investments in gold.
28th January 2026 13:32
by Graeme Evans from interactive investor
Holders of gold equities including Endeavour Mining (LSE:EDV) and Pan African Resources (LSE:PAF) are already sitting on gains of more than 15% this year after the price of bullion topped $5300 an ounce.
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South America’s Hochschild Mining (LSE:HOC) has been the biggest beneficiary among the London market’s major names with a rise of 40%, while Australia-based Greatland Resources Ltd (LSE:GGP) is up 30%.
This year’s continuation of the trends seen in 2025, when the precious metal’s price rose by 63%, has been stoked by a four-year low for the US dollar as well as challenges to the international rules-based order that has been in place since 1945.
Deutsche Bank said this week that it thinks $6000 an ounce is achievable with a weaker dollar.
It added: “Gold’s continued rise reflects investment motives which may be persistent: higher reserve allocations, and investors raising allocations to non-dollar and real assets.”
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President Donald Trump’s policy moves and pressure on the Federal Reserve for rate cuts have caused the dollar index to fall by 3.5% in the past fortnight. He said yesterday he is comfortable with this weakness, further boosting the cost outlook for gold in other currencies.
Falling interest rates have also reduced the opportunity cost of holding the zero-yielding asset, while higher government debts and persistent inflation reinforce gold’s status as a long-term portfolio diversifier.
Berenberg noted this week that rising commodity prices could in turn serve to fuel gold’s advance as a store of value in inflationary times.
It added: “Net speculative positions for gold continue to push higher, as do ETF (exchange-traded fund) holdings. We would not be taking profits on gold names at this point in time and remain bullish on gold equities.”
The bank’s favoured names are Endeavour Mining, Wheaton Precious Metals Corp (LSE:WPM) and Fresnillo (LSE:FRES) among the large caps, with Pan African Resources and Resolute Mining Ltd (LSE:RSG) the pick of small and mid-cap stocks.
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Schroders said this week that major gold equity benchmarks rose by between 150% and 169% in 2025 but that valuations look different when measured relative to margins.
The asset and wealth manager said: “If you look at the average price ratio of gold equities to gold bullion over the 2022/23/24 period, gold equities are around 25% higher despite a completely transformed margin and returns environment.
“As we continue to point out repeatedly, it surprises us that despite operating margins that are more than 150% higher than the brief peak of 2020, gold stocks remain cheaper relative to gold bullion today (on a price basis) than they were then.”
It said the news flow in early 2026 continues to speak loudly to long-cycle geopolitical and fiscal themes, adding that the evolution of gold from being viewed as a rate-sensitive cyclical hedge to a core “anti-fragile” secular portfolio allocation has a long way to run.
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Schroders said: “The secular top will be reached when either the geopolitical and fiscal drivers are resolved (ushering in a new status quo) or demand itself is undeniably saturated. We don’t think either of those requirements are near to being met.”
Deutsche Bank added that in two-thirds of cases where there have been sharp episodes of gold appreciation, the price is higher still after six and 12 months. It adds that the big gold price declines in the 1980s were a result of disinflation allaying the key investor concern.
The bank said: “Today we think the drivers are more structural than episodic, including reserve managers reducing exposure to the threat of foreign asset freezing, investors seeking allocations to non-dollar and real assets, with long-term projections of government debt growth in mind.”
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